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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Nadine Carroll who wrote (97239)	8/10/2002 2:51:05 PM
From: Tommaso	Read Replies (1) \| Respond to of 132070

What will kill the 30-year bond is when the Fed decides to fight inflation by raising rates--or is forced to raise rates because of increasing inflation expectations. It won't be as bad as the poor suckers who put family fortunes in bonds paying 3% in the forties and fifties, but if interest on the 30-year got back to 8%, it would imply a drop of over 30% in the principal, wouldn't it? But that could take several years and if in the mean time the yield on the 30-year dropped to 4%, it would be pretty painful to be sitting in that fund. I just asked MB because although he knows a lot about a lot of things, he's the best bond analyst I know of.